Finnovation Masters

Banking Frontiers is organizing a series of conversations on the theme Finnovation Masters. We have Sendil Kumar V, Shriram Capital and Nehal Mehta join Babu Nair in exploring finnovation:

Babu: Sendil, how has Shriram Capital transformed as an organization? How are you adapting new innovations and at the same time maintaining the physical and digital transformation together?

Sendil Kumar V: Shriram Capital is the overarching holding company of Shriram Group. We are predominantly into finance and insurance. I am in this group for the past 2 decades and seeing a lot of transformation in the group, from legacy or a normal business that we used to do, to digital business currently. Our business is predominantly for the unserviced segment in the country, ie the bottom of the pyramid. The challenges are to reach them and to bring technology to them.

During the past 5 years, we noticed that there are a lot of changes on the digital environment where we could bring easily the technology to reach them. So we have done several technology innovations to reach them. Some 8 years earlier itself, we started using mobile applications (initially with B2B) where a field executive need not take a receipt, need not take a device - just a mobile phone is sufficient for him to go there and collect. The customers need not come to the branch and pay in cash. The field executive will go there, reach them, collect it, and simultaneously the entry will be passed and in such a way that it’ll be on the online system. So now, 60% of our sales and business is happening through mobile.

Babu Nair: How do you manage build versus outsource, and how do you orchestrate it together to deliver that experience to the customer?

Sendil Kumar V: We have an internal team that does the basic level of application and user support. We have a group company named Nova

Technologies, which is a CMM level 5 and ISO 27001 company. I feel that technology and the business should join together, then only we can bring the solution. It should be win-win for both. We also follow agile methodology so that when the user gives a requirement, our team quickly develops it, tests it simultaneously, and we try to bring to production, rather than in a slow phased traditional manner.

Babu Nair: When Sendil is speaking about this entire objective of innovating fast, bringing together the business and technology faster, the important thing is to bring in agility in this innovation. So Nehal, how can organizations add more value to their business strategy and goals by choosing the right kind of agility technologies?

Nehal Mehta: Like Sendil said, a lot of the financial services institutions in the country today are thinking ahead. Many have been on the 2.0 or 3.0 sprints of innovation. We work with our customers to align cloud adoption initiatives closely with their business priorities to gain maximum value out of it. We have our own mechanisms like Working Backwards and Culture of Innovation that have been leveraged by senior management of many of our customers. We bring their business and technology teams together and are able to translate their vision into reality. Cloud adoption helps remove the entire heavy lifting of managing the infrastructure, and developers can free themselves from mundane work and devote more time to creative thinking and design innovations. As you adopt more managed services modernize your infrastructure, you get the agility to respond to market needs. What’s important is that cloud

allows you to experiment easily and keep improvising at a cost that is far lower and palatable.

Babu Nair: Sendil, how have you been creating a balancing act in all this entire scenario of the world of data?

Sendil Kumar V: We are bringing lot of technology in such a way that we are not compromising on security. But in the name of security, you cannot have everything with you, as then the business can’t grow and you can’t do the business in the same way you were doing 3 years ago. At Sriram Housing Finance, we have a huge plan to go on a hybrid cloud. Currently we have a private cloud. We will use microservices to make a thin application. Second is that we have a flexibility to switch up and when we need it and use the resources accordingly. No NBFC has tried blockchain and we are the first company to go forward with blockchain. We are giving a fix deposit on the blockchain. TWe give a QR code with a link and whenever you click the QR code you can immediately see details about your deposit and also you can authenticate your said deposit.

Babu Nair: That is really inspiring. Nehal, what have been some inspiring innovations, which you have seen built on the cloud and probably amplified to the word?

Nehal Mehta: We have had the privilege to partner with organizations of repute who have been early cloud adopters. They have been able to launch some very interesting innovations on AWS. As an example an end-to-end digital straight through processing journey for core banking or core insurance processes. And what’s unique in this STP journey is that it brings together 3 different unique sets of cohorts - end customers, employees and partners. Many of our NBFC have been able to leverage alternative data for better credit decisioning, reducing the turnaround time for loan disbursement from 15 days to 4 days to 2 hours to few minutes. Several NBFCs in India have adopted cloud very well, not just in terms of moving workloads to cloud, but modernizing them and going beyond to AI and Machine Learning technologies, like how Sendil was explaining. AI and machine learning technologies combined with the power of alternative data added to it, really give a frictionless journey to the end customer, and have a direct impact on the bottom line in terms of reduced delinquency ratios and increased approval rates and cross sell upsell rates. Continuous credit assessment is also very relevant post the disbursement which is possible with dynamic ML models on cloud.

Babu Nair: Sendil, what do you see are the technologies that are going to drive the future of the businesses in the world of finance?

Sendil Kumar V: See, there is a huge competition in the finance business among small banks, microfinance, normal banks and NBFCs. Technology plays a huge role here to transform the business. We should be very clear on how to make the business ease and how to ensure that from the technology side. And we have to understand business thoroughly, how easily we can bring the technology in the business and environment. So we should understand the business thoroughly. The processing time of each and every activity will come down and definitely there are new areas where AR and VR are can be used by virtually seeing and then connecting with the business. In a nutshell, I feel that cloud along with the proper security in place, along with AI and mobile will be ruling in the finance and insurance business. Also, the working culture also should change where you can’t expect everything to be done with the same inhouse team.